Modern Mining November 2022

coal consumption. Even in regions that have for years tried reducing their reliance on coal, such as the United States and the EU, coal power genera tion increased by around 20% in 2021 compared to 2020. Additionally, coal consumption increased by 12% in India and 9% in China respectively, in 2021, which led to coal power generation reaching record levels in both countries. According to the International Energy Agency (IEA), the rebound in global industrial output and overall coal demand worldwide increased by 6% in 2021, which brought coal consumption to record lev els it last reached in 2013 and 2014. The IEA stated that beyond 2021, global coal con sumption was set to revert to the pattern seen over the previous decade, which meant there would be declines in advanced economies (US, UK and the EU) that would be offset by growth in some emerg ing and developing economies (China, India and Vietnam). The IEA stated that this would mostly be driven by the power sector, where slow electricity demand growth and rapid expansion of wind and solar PV would gradually erode the coal power gen eration market share. The IEA noted another factor that would lead to coal usage decline, that is, lower gas prices. Nonetheless, based on 2021’s analysis, global coal demand was set to increase to 8.025 billion tons in 2022, the highest level recorded and would remain at these levels through to 2024. Ukraine War: Coal to the rescue The war in Ukraine and the subsequent Western sanctions imposed on Russia which, in turn, reduced its supply of gas to Europe, has brought coal back into the mainstream. Several EU countries are extending the life of coal plants scheduled for clo sure, reopening closed plants or raising caps on their operating hours to reduce gas consumption. Several European countries such as Denmark, the UK, Italy and others are once again buying coal from South Africa. Energy security took priority and coal, once again, was seen as the solution. As a result, global coal prices have increased substantially in the aftermath of the Russian invasion of Ukraine. ICE Newcastle

coal for March 2022 delivery reached US$274.50 per ton on 28 February 2022, an increase of 9.15% compared to the previous day. Russia is the world’s sixth-largest coal producer. And, with its imports fall ing under Western sanctions, coal importers had to look elsewhere. BP’s Statistical Review of World Energy 2021 data showed that Russia’s coal produc tion reached 399.8 million tons in 2020. In terms of exports, IEA data revealed that Russia is the third largest exporter of coal after Indonesia and Australia, exporting around 200 million tons a year on average. The IEA notes that coal consumption in the EU is expected to rise by 7% in 2022, which comes in addi tion to 2021’s 14% increase in coal use. This is being driven by demand from the electricity sector where coal is increasingly being used to replace gas, which is in short supply and has experienced substantial price spikes following Russia’s invasion of Ukraine. The Netherlands recently joined Britain and Germany, warning that it will have to use significantly more coal this winter to stave off looming energy shortages. The Telegraph reported in April: “There are growing fears that Russia’s gas will be cut off, adding further to demand and raising the prospect of blackouts or energy rationing on the Continent.” Again it is coal that has come to the rescue, as it did during the Industrial Revolutions; in the post World War 2 reindustrialisation of global economies; in the rebuilding of economies post the Covid-19 lockdowns and now again in Europe’s coldest and darkest hour of need! 

Several European countries are once again buying coal from South Africa.

Left: For centuries coal has been a vital cog in the world’s energy mix. Below: Global coal demand is set to increase to 8.025 billion tons in 2022.

November 2022  MODERN MINING  11